US presents bills to ban sale of components to Huawei and ZTE

January 17, 2019

A group of US lawmakers introduced bills that would ban the sale of telecom components to Huawei Technologies, ZTE or other Chinese telecommunications companies that violate US sanctions or export control laws, Reuters reported.They introduced the proposed law shortly before the Wall Street Journal reported federal prosecutors were investigating allegations that Huawei stole trade secrets from T-Mobile U.S. and other U.S. businesses.

Senator Tom Cotton and Representative Mike Gallagher, both Republicans, along with Senator Chris Van Hollen and Representative Ruben Gallego, both Democrats, introduced the bills that would require the president Donald Trump to ban the export of US components to any Chinese telecommunications company that violates U.S. sanctions or export control laws.

The bills specifically cite ZTE and Huawei. Huawei is the number one telecom equipment maker in the world. ZTE is the fourth largest telecom network company. US believes that both Huawei and ZTE are not respecting US laws.

“Huawei is effectively an intelligence-gathering arm of the Chinese Communist Party whose founder and CEO was an engineer for the People’s Liberation Army,” Cotton wrote in a statement.

“If Chinese telecom companies like Huawei violate our sanctions or export control laws, they should receive nothing less than the death penalty – which this denial order would provide.”

Huawei’s founder, Ren Zhengfei, denied this week that his company was used by the Chinese government to spy. In fact, Huawei is aiming to grow business in 2019 despite the challenging market conditions.

ZTE last year agreed to pay $1 billion penalty to the US after the company breached a U.S. embargo on trade with Iran. The U.S. lifted a ban in place since April that had prevented ZTE from buying the US components to make smartphones and other devices.

Meanwhile, federal prosecutors are investigating Huawei Technologies for allegedly stealing trade secrets from US businesses and could soon issue an indictment, the Wall Street Journal reported on Wednesday.

The investigation arose out of civil lawsuits against Huawei, including one in Seattle where Huawei was found liable for misappropriating robotic technology from T-Mobile.

T-Mobile alleged in a 2014 lawsuit, filed in federal court in Seattle, that Huawei employees stole technology relating to a smartphone-testing robot T-Mobile had in a lab in Bellevue, Washington.